20040401Final Order No 29459.pdf

Office of the Secretary
Service Date
April 1 2004
BEFORE THE IDAHO PUBLIC UTILITIES CO MMISSI 0 N
IN THE MATTER OF THE APPLICATION OF
VERIZON NORTHWEST INC. FOR AN
INVESTMENT TAX CREDIT FOR INSTALLING
QUALIFIED BROADBAND EQUIPMENT
IN THE MATTER OF THE APPLICATION
OF DIRECT COMMUNICATIONS ROCKLAND,
INc. FOR AN INVESTMENT TAX CREDIT FOR
INSTALLING QUALIFIED BROADBAND
EQUIPMENT
IN THE MATTER OF THE APPLICATION OF
ALBION TELEPHONE COMPANY FOR
INVESTMENT TAX CREDIT FOR INSTALLING
QUALIFIED BROADBAND EQUIPMENT
IN THE MATTER OF THE APPLICATIONOF SYRINGA NETWORKS LLC FOR AN
INVESTMENT TAX CREDIT FOR INSTALLING
QUALIFIED BROADBAND EQUIPMENT
IN THE MATTER OF THE APPLICATION
OF SALMON INTERNET FOR AN INVESTMENT
TAX CREDIT FOR INSTALLING QUALIFIED
BROADBAND EQUIPMENT
CASE NO. VZN-04-
CASE NO. DCM-04-
CASE NO. ALB-04-
CASE NO. SZ9- T -04-
CASE NO. GNR- T -04-
ORDER NO. 29459
In February and March 2004, the Commission received several applications from
Companies requesting that the Commission certify that certain equipment they have installed is
eligible for the broadband infrastructure tax credit authorized by Order No. 28784 and Idaho
Code ~ 63-30291(4).
BACKGROUND
Pursuant to Idaho Code ~ 63-30291, an Idaho taxpayer may receive a tax credit for
making "qualified investments" in "qualified broadband equipment" in Idaho, defined as
network facilities that are capable of transmitting signals at a rate of at least 200 000 bits per
second (bps) to a subscriber and at least 125 000 bps from a subscriber. Idaho Code ~ 63-
30291(3)(b), see also, Idaho Code ~~ 63-3029B and 63-30291(3)(b). To be eligible for the tax
credit, the taxpayer must obtain an order from the Commission confirming that the equipment
ORDER NO. 29459
has been installed and that it meets the definition of qualified broadband equipment. Idaho Code
~ 63-30291(4). To implement its responsibilities under Idaho Code ~ 63-30291, the Commission
issued Procedural Order No. 28784 in July 2001 , identifying the information that must be
included in an application in order for it to be able to determine whether the installed equipment
qualifies for the tax credit.
THE CURRENT APPLICATIONS
Verizon Northwest, Case No. VZN-04-. In its Application, Verizon states that
during calendar year 2001 it installed equipment used to provide DSL and high-speed data (e.
1) services to customers in the exchanges of Bayview, Bonners Ferry, Coeur d'Alene
Genesee, Hayden Lake, Kellogg, Moscow, Orofino , Pinehurst, Sandpoint and St. Maries. Such
components include digital access platforms, long-range digital transport, line cards, access
ports, fiber optic cable, fiber terminals and supporting software. Verizon states that transmission
rates range from 128 kbps to well beyond 1.544 Mbps. The Application states that Verizon
invested approximately $1 150 000 in qualifying broadband equipment during 2001.
Direct Communications, Rockland Inc., Case No. DCM-04-Direct's Application
states that during calendar year 2003, the Company installed equipment used to provide ADSL
services to customers in Bear Lake, Bannock, Caribou and Power counties. Such equipment
includes fiber optic placing equipment, fiber optic cable, a DSLAM, digital line cards, Ethernet
network extenders, an access multiplexer and supporting labor and software. The Company
states that transmission rates range from 512 kbps upstream to 8 Mbps downstream. Direct
states that it invested approximately $751 000 in qualifying broadband equipment during 2003.
Albion Telephone Company, Case No. ALB-04-. Albion s Application states that
during calendar year 2003, the Company installed over 80 miles of fiber optic cable, digital line
cards and supporting power supply and software in providing ADSL services in Custer, Oneida
Butte and Cassia counties. The Company states that transmission rates range from 256 kbps to
1.54 Mbps. Albion states that it invested approximately $2 138 000 in qualifying broadband
equipment during 2003.
Syringa Networks, LLc. Case No. SZ9-04-In its Application, Syringa states
that it placed over 260 miles of fiber optic cable in Ada, Canyon, Washington, Gem, Clark
Blaine and Camas counties. The Company also states that it installed digital switching
equipment, SONET multiplexers, Dense Wave Division Multiplexers (DWDM), testing
ORDER NO. 29459
equipment, modular routers and supporting power supply and software. Syringa offers high-
speed transport, frame-relay and other related services to customers at transmission rates of
544 Mbps and higher. The Company also states that all of its customers are Idaho subscribers.
Syringa states that it invested approximately $13 644 000 in qualifying broadband equipment
during calendar year 2003.
Salmon Internet, Case No. GNR-04-. Salmon Internet's Application states that it
installed wireless broadband access units, antennae and supporting lightning arrestors during
calendar years 2001 and 2002. The Company did not indicate the cost of the equipment but
states that transmission rates are between 256 kbps and 1 Mbps for its customers in Lemhi
County. Salmon Internet's network consists of one base station and two repeater stations to offer
high-speed Internet access to customers in the Salmon, Idaho area.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the lists of proposed broadband equipment submitted by the
Companies and believes that the equipment identified qualifies for the investment tax credit
pursuant to Idaho Code ~ 63-30291. In the case of Salmon Internet, Staff is not aware of the
purchase arrangement or amounts but believes the equipment is installed and complies with
Idaho Code ~ 63-30291(3)(b)(iv). Therefore, Staff recommended approval of the Applications
and further recommended that the Commission forward the approving Orders along with a copy
of the original Applications to the Idaho Tax Commission.
COMMISSION FINDINGS AND DECISION
Having reviewed the record in each of the above matters, we find that the
Applications for a qualifying broadband equipment Order should be granted. The Companies
filing these Applications have adequately demonstrated that they installed the qualifying
broadband equipment identified in their Applications in conformance with requirements set forth
in Idaho Code ~ 63-30291. We further find that as configured the installed equipment is an
integral part of a broadband network necessary to deliver broadband services to Idaho customers.
It is therefore appropriate for the Commission to issue this Order confirming that Verizon
Northwest Inc., Direct Communications Rockland, Inc., Albion Telephone Company, Syringa
Networks, LLC, and Salmon Internet have installed qualified broadband equipment as a
precondition to seeking an investment tax credit.
ORDER NO. 29459
ORDER
IT IS HEREBY ORDERED that the Applications requesting that the Commission
certify that certain telecommunications equipment installed in 2001 , 2002 and 2003 by certain
Companies is eligible for the broadband infrastructure tax credit authorized by Idaho Code ~ 63-
3029 et seq. are granted.
IT IS FURTHER ORDERED that Verizon Northwest Inc.s Application for an Order
certifying that it installed qualified broadband equipment during 2001 , Case No. VZN-04-, is
granted.
IT IS FURTHER ORDERED that Direct Communications Rockland, Inc.
Application for an Order certifying that it installed qualified broadband equipment during 2003
Case No. DCM-04-, is granted.
IT IS FURTHER ORDERED that Albion Telephone Company s Application for an
Order certifying that it installed qualified broadband equipment during 2003, Case No. ALB-
04-, is granted.
IT IS FURTHER ORDERED that Syringa Networks LLC's Application for an Order
certifying that it has installed qualified broadband equipment during 2003 , Case No. SZ9- T -04-
is granted.
IT IS FURTHER ORDERED that Salmon Internet's Application for an Order
certifying that it installed qualified broadband equipment during 2001 and 2002, Case No. GNR-
T -04-, is granted.
IT IS FURTHER ORDERED that a copy ofthis Order and copies of the Applications
be served upon the Idaho State Tax Commission.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) in the Case Nos. VZN-04-, DCM-04-, ALB-04-, SZ9-04-
and GNR-04-3 may petition for reconsideration within twenty-one (21) days of the service
date of this Order with regard to any matter decided in this Order or in interlocutory Orders
previously issued in these cases. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code ~~ 61-
626 and 62-619.
ORDER NO. 29459
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this 3c/
5f'
day of March 2004.
P :z~4LENT
MARSHA H. SMITH, COMMISSIONER
ENNIS S. HANSEN, COMMISSIONER
ATTEST:
~RJie D. Jewell
Co mission Secretary
0: VZNT0402 DCMTO401- ALBTO40 1- SZ9TO401- GNRTO403
ORDER NO. 29459